A simple tale of collections
So you grant credit and then someone abuses it and now you have to collect. But from whom and from what?
The work can go from simple to difficult very quickly, but there are a few basic steps to begin with.
A) Document the debt and all of the information you may have on the debtor and go get a judgment. This process varies from state to state so we can’t be specific here.
B) Once you have the judgment on a person or a company, send them a letter so you can warn them about what you are going to do: Give them one last chance. This shows good intentions on your part, and their failure to respond shows bad intentions on their part.
C) Pull a credit report and look for employer information. Call the employer and verify employment. If the employer information is not current begin the process of calling each and every one of the creditors and employers, beginning with the most recent first and going to the oldest last. Ask about employment, residential information, telephone numbers and — if you’re lucky — bank accounts.
D) If this doesn’t work, go to public records and look for lawsuits either in the small claims area or the county courts. Also look to the CountyRecorder’s office for things such as property, tax liens, etc.: Anything that will give you a clue or new information. For example, a fellow I was looking for had vanished. I knew he was near, but I could not find him until … a Federal Tax Lien was filed against him with his new address. E) At this time I usually try to use an innocent pretext. I’ll knock on the person’s door and ask if they have seen an incident — an accident or a yelling dispute in the street and also ask if I can get their work number so I can call them during the day — to make things easier for them. Bingo! Here and there, pretexts are needed to finesse information about a debtor. (I am using this example to illustrate the difference between illegal methods used by unscrupulous information brokers and investigators). Never ever represent that you are with law enforcement, nor should you ever represent to a third party (bank, telephone company, etc.) that you are the debtor in order to get information to which only the debtor should have access. Pretexting is an important tool of the investigative trade and must be used properly to get the information you need. If you abuse your ability and go over the line you may blow any chance of recovery, and you may hurt your client, and you may end up before a judge.
F) Use the attorney’s expertise to garnish assets and wages you may have found. Some interesting things to garnish that are usually overlooked: Rental and utility deposits, brokerage accounts, stock in privately held companies, ownership in LLC and Partnerships (ownership records can be found at the state level), value in an automobile or a home over the exemption amounts in your state, etc.
G) Last but not least, sometime you have to get their attention. Work with the local Sheriff’s Office and / or the U.S.Marshals Office and clean out their homes and offices. This forces one of three events: Payment in full or part, bankruptcy filing, or debtor flight.